South Africa’s cash-strapped national airline SAA says a government cash injection of R5.5 billion ($376 million) approved for the 2019/20 financial year is expected at the end of the month but it still needs more money, a presentation to lawmakers showed on Wednesday.
South African Airways (SAA) has debt of about R12.7 billion, consisting of R9.2 billion of legacy debt and a R3.5 billion working capital facility provided by banks.
The airline requires R2 billion by December to fund working capital for its 2019/20 financial year, the presentation said.
SAA, the turnaround strategy of which has been stymied by mismanagement and inability to service its debt in an increasingly competitive aviation environment, also received a R5 billion government bailout in its 2018/19 financial year.
The state-owned flag carrier’s long-term strategy is based on an equity injection of nearly R22 billion. The government, meanwhile, wants further cost reductions before committing more money during a time of weak domestic growth and is also considering how it might find a commercial partner for the airline.
In the presentation, SAA said it is in negotiations with lenders to make R2 billion available for working capital, adding that it would have to meet certain conditions to obtain the funding.
“Lenders have the following conditions,” it said. “Repayment of short-term funding of R3.5 billion by September 2019, which is already provided for, and a debt reduction and payment plan for the legacy debt of R9.2 billion.”